Four strategies to strengthen your startup
After the first few months of (we’d expect) frantic activity starting up, it’s useful to take a breath to assess what went right and what you need to tweak going forward. It’s also recommended to secure the initial success of your business by switching from ‘start-up’ to ‘existing business’ mode as fast as you can.
We have four key strategies to help you achieve this.
Strategy 1. Focus on your best customers
Before you launched, you may have thought you knew who your best customers would be.But often what you think doesn’t survive the impact of starting. You never know who will end up as your best customers. Whoever they happen to be, develop strategies to sell more to them.
These ‘best’ customers may not always be those that spend the most. Maybe they’re the ones who understand the way your business works, pay on time, buy high margin products or services and refer other customers with positive word of mouth. Or maybe they do just spend the most!
Set up processes as early as you can to keep in contact with your favorite customers such as:
- Call to re-order (don’t wait for them to remember)
- Sending limited or exclusive offers
- Invite customers to workshops, webinars or special events
- Send useful industry information
- If they are a business, refer customers to them
- Notify new product launches in advance of the general public.
Any way you can get in front of your best customers will likely be cost effective.
Strategy 2. Spread your net
After you’ve locked in loyal customers, find new people or businesses that look a lot like your existing good customers. They should have similar needs and therefore need less convincing to buy from you. Identify where these potential customers may be and develop a plan to get in front of them.
A few options include:
- Finding contacts within your networks and approaching new customers directly
- Online advertising that matches their profiles
- Adding interesting content to your website to build leads
- Posting in the social media channels your customers visit
- Optimizing your website for search engines to increase traffic.
If you target other businesses, then it could be as simple as finding owner details in directories or driving around the block to find possible new customers and ask them in person to do business with you.
Strategy 3. Find new channels
Sometimes there are growth opportunities by altering the way you do business, especially if the way people buy changes. There are increasingly more sales channels available to a business such as selling online and third-party sites like Amazon and eBay. Some businesses sell monthly subscriptions to users, others license their intellectual property or collaborate with complementary businesses to sell on their behalf.
If you feel you’re missing out on sales, not because of what you do but how customers want to transact, it’s probably time to change the way you sell.
Strategy 4. Tighten up cash flow
This last strategy isn’t about trying to find more growth revenue, it’s about re-discovering the cash that’s fallen under the couch. Improving your existing systems and creating efficiencies will often drive extra profit to the bottom line, reducing the effort to get new revenue.
This is even more important if it’s getting harder and harder to increase sales growth (or it’s declining) after the initial surge of sales often experienced by start-ups.
Look to fix potential cash slippage cracks by:
- Implementing compulsory credit checks to reduce bad debts
- Having strong systems to reduce fraud
- Conducting regular (and unannounced) inventory audits to identify wastage or theft
- Adopting your industry software to streamline processes (every industry tends to have specialist software)
- Using accounting software to track daily cash flow
- Requesting deposits or progress payments to reduce
- Using credit scoring systems and setting appropriate credit limits to minimize any losses.
You can also improve your cash flow by increasing prices and reducing costs across your whole business.
Finally, contact your existing customers and ask them the reason why they bought from you and not someone else. Most likely their answers will form your main competitive advantages to feed back into your advertising and promotional messages.